Better enforceability of the debts of apartment owners

On 1 December 2017, an amendment to the Code of Civil Procedure, the Law on Insolvency and the Law on Foreclosure will come into force, improving the position of the apartment owners associations in the forced sale of the apartments of the debtors.

The amendment introduces a new creditor class for the apartment owners associations. This creditor class is superordinated to mortgage creditors and other secured creditors when the proceeds of the sale are paid out. The priority of the apartment owners associations, however, only affects one-tenth of the proceeds of the forced sale. In addition, only those claims of the apartment owners associations that have already been brought before the court may be asserted in a foreclosure. Nevertheless, the amendment brings significant progress in the rights of apartment owners associations.